By: Shige Ihara, President & CEO, NEC X
NEC X launched in 2018 as a new pathway for outward-bound, open innovation. NEC already had world-class, cutting-edge technology from NEC research and development, but to put the technology to good use, NEC X developed a Corporate Accelerator Program (CAP) to match talented entrepreneurs, known as Entrepreneurs-in-Residence (EIRs), with NEC’s researchers or engineers and technology in an effort to find new applications for commercialization.
This outward-bound, open-innovation model of startup acceleration was bold, cutting against the grain of most other Silicon Valley tech accelerators, which usually support ventures that have already invented a technology that addresses a specific customer problem. As we celebrate our third anniversary this year, this innovative approach is paying off.
In just three years we’ve had many accomplishments, including three spin-outs and some additional promising stealth-mode ventures from the CAP. We’ve evolved our program and support day by day, cohort by cohort, thanks to those who have been a part of NEC X.
Professor Charles O’Reilly III, Stanford Graduate School of Business, said he has been very impressed with our success and achievements relative to other accelerators in Silicon Valley.
“According to the rule of thumb for venture investment in Silicon Valley, 10% of new startups might be successful, 10% to 20% will be marginally successful and return their investment, while 70% will fail,” O’Reilly said. “NEC X has evolved from being a new startup itself and is on track to have a success rate that surpasses the norm.”
Our three graduates from the CAP are:
- Inguo.io, a market research software product that uses automation and machine learning to discover causality from complex datasets and provide more robust and actionable insight. Inguo.io is expanding its market share in the retail, health care, finance and human resources industries.
- Metabob, an artificial intelligence Python code-review tool that detects where problems are, determines how they interact with other aspects of the codebase, and provides recommendations on how to fix them. Metabob incorporated with support and investment from NEC X and third-party investors and is acquiring enterprise customers.
- GAZIRU, an image-recognition technology company backed by a strategic venture capitalist that is currently acquiring customers in the retail, manufacturing and distribution industries.
All of these startups began with technology from NEC R&D as their roots. EIRs were paired with NEC technology researchers to develop the products from ideation to launch, with coaching and support from NEC X.
David Wolfe, CEO and founder of Inguo.io, said that NEC’s technology and NEC X’s support set up his venture for success.
“Not only did the NEC X CAP give us access to truly groundbreaking technology from NEC, it also helped us develop a unique business model and begin refining it with actual customers in a matter of months,” said Wolfe. “This combination of innovative technology access with a well-resourced and clearly defined mentoring process for commercialization provided us with a greater chance for rapid success than we found with any other incubator program.”
The full CAP process, which includes customer research and discovery, several minimum viable product iterations, and customer validation, usually takes six to nine months. At the end, CAP graduates can launch a new independent company with a venture funding round, incorporate the business into the NEC main lines of business, or have the company incorporate with NEC as a co-investor.
Recently, we entered into a strategic partnership with Alchemist Accelerator, a venture-backed initiative focused on accelerating the development of early-stage B2B startups, to offer additional support for our startups. NEC X has access to Alchemist’s methodology and resources, as well as the Alchemist network of entrepreneurs, venture capitalists, corporations and mentors. Additionally, several NEC X CAP graduates have joined the Alchemist Accelerator Program for further growth and investment opportunity.
With the Alchemist partnership, the potential for more collaboration among talented people in our network is exciting. Add to this the potential new ventures in the pipeline, and our future looks extremely bright. We are continuing to recruit new EIRs to pair with NEC technology, especially in areas such as artificial intelligence (recognition, analytics and control), system platforms, technology communications, and security and networks.
Thank you for your support over the last three years! We look forward to driving innovation forward into the new year. Follow us to stay in the know.